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ELRCPartially AllowedCause No 433 of 2015· [2017] KEELRC 1689 (KLR)

Kenya Airways Limited v Kenya Airline Pilots Association [2017] KEELRC 1689 (KLR)

Employment and Labour Relations Court of Kenya
1 March 2017
HWHellen Wasilwa
5,343 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court confirmed that employers may use an early retirement clause instead of declaring redundancy, but claims for losses need solid proof.

What this practically means

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Executive summary

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The Claimant (an airline, not named in the judgment) sued the Respondent (its Pilots' union/association) seeking declarations that industrial action undertaken without exhausting the statutory dispute resolution process is unlawful, mandatory injunctions restraining and retracting calls for strikes or withdrawal of goodwill, and compensation of Kshs. 97,916,413/= for losses and salaries paid after retirement notices. The Respondent filed a Memorandum of Response and Counterclaim, contending that the termination of eight B777 Pilots pursuant to Clause 34(b) of the CBA was in substance a redundancy, both substantively and procedurally unfair, and sought reinstatement, an injunction against termination, or damages under Section 40 of the Employment Act and Clause 45 of the CBA. The Court framed five issues and found that the Claimant lawfully invoked the early retirement clause of the CBA; the employer cannot be compelled to declare redundancy where a legal alternative exists in the contract, since courts cannot rewrite contracts for parties. The Court distinguished voluntary early retirement (VER) from contractual early retirement, holding the latter may be exercised unilaterally. The Claimant's claim for losses from the goodwill withdrawal failed for want of proof of causation, the CW1 having admitted flights could be cancelled for other reasons. The claim for refund of salaries paid after retirement notices also failed, as those payments were made under subsisting Court stay orders. The Court partially allowed the Respondents' claim on leave, awarding only Captain Areri and Captain Ithongo pay for unserved leave days (Kshs. 503,816/= and 1,678,849/= respectively, less statutory deductions). Judgment was read in open Court on 1st March 2017 by Hellen Wasilwa, Judge. No costs order appears on the face of the judgment text.

Key legal issues

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01

Whether the Pilots were retired or declared redundant

Holding

The Pilots were retired under Clause 34(b) of the CBA, not declared redundant; the early retirement provision was lawful and available to the employer

Reasoning

The Claimant faced economic challenges necessitating phasing out of the B777 aircraft, which could have constituted a redundancy. However, the CBA contained both early retirement and redundancy provisions. The early retirement clause applied to employees with 10+ years' service aged 50+. The Claimant lawfully elected that clause and paid full retirement benefits.

p. 8
02

Whether an employer can be forced to declare redundancy as opposed to early retirement

Holding

No; both options are legal and the employer's election of the retirement clause does not make the election illegal or unjustified

Reasoning

The Court held the guiding principle is the law and the CBA. Both early retirement and redundancy provisions are legal. The fact that Respondents would have gained greater benefit under redundancy does not invalidate the employer's choice. Courts cannot rewrite contracts for parties.

p. 9
03

Whether Respondents caused the Claimant's losses during the goodwill withdrawal

Holding

The claim for losses failed as the Claimant produced no proof that the Respondents occasioned the losses

Reasoning

The documents produced were mere calculations of losses. CW1 admitted under cross-examination that flights could fail to fly for technical reasons or pilot sickness, undermining causation. The burden of proving loss was on the Claimant and was not discharged.

p. 9
04

Whether Respondents must refund salaries paid after retirement notices

Holding

No; the monies were paid during the subsistence of Court-ordered stay and cannot be refunded

Reasoning

The salaries were paid pursuant to the Court's own orders of stay obtained by the Respondents. Once the orders were lifted, the Claimant could not seek reimbursement of payments made during the orders' subsistence. The Court also treated the period worked without duties as covering accrued leave days.

p. 9
05

Leave days due to the Respondents

Holding

Only Captain Areri and Captain Ithongo had leave days exceeding the 110-day worked period and were awarded pay for 12 and 44 days respectively

Reasoning

The Court deemed the 110-day period worked after retirement notice (14th October 2015 to 3rd February 2016) as covering leave entitlement. All Respondents except two had fewer than 110 leave days. The two exceptions were awarded Kshs. 503,816/= and Kshs. 1,678,849/= respectively, less statutory deductions.

p. 10

Legal principles established

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  • An employer may lawfully elect to retire employees under an early retirement clause in the CBA rather than declare them redundant, and the Court cannot force parties to rewrite their contract.
  • Early retirement under CBA Clause 34(b) is not voluntary early retirement (VER); it can be exercised unilaterally by the employer and the employee cannot resist it.

Court orders

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  1. 1.Finding that Clause 34(b) of the CBA was rightfully used and the Respondents cannot be declared redundant as opposed to early retirement
  2. 2.Dismissal of the Claimant's claim for reimbursement of losses incurred due to withdrawal of goodwill
  3. 3.Dismissal of the Claimant's claim for refund of moneys paid to Respondents during subsistence of Court stay orders
  4. 4.Leave pay awarded to Captain Areri and Captain Ithongo only, translating to Kshs. 503,816/= and 1,678,849/= respectively, less statutory deductions
  5. 5.Claim otherwise not allowed as drawn

Authorities

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Legislation

  • Employment ActSections 2, 40, 43, 45(2)
  • Labour Relations ActSection 2
  • National Social Security Fund ActSection 36(1)

Cases cited (8)

  • Daniel Johannes De Wet vs. Government Employees Pension Fund
  • Moses Kaunda Moro vs. CMC Motors Group Ltd
    (2013) eKLR
  • Walter Ogal Anuro Vs. Teachers Service Commission
    (2013) eKLR
  • Kenya Plantation and Agricultural Workers Union vs. Bamburi Cement Limited & Another
    (2015) eKLR
  • Patricia Bini vs. Melina Investments Limited & 3 Others
    (2015) eKLR
  • Rufale vs. Umon Manufacturing Company (Ramsboltom)
    (1918) L.R. 1KB 592
  • Attorney General of Belize et al vs Belize Telecom Limited & Another
    (2009), 1 WLR 1980
  • Trollope Colls Limited vs. North West Metropolitan Regional Hospital Board
    (1973) 1 WLR 601
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (specific provision not cited in judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Airways Limited v Kenya Airline Pilots Association [2017] KEELRC 1689 (KLR)", Case Analysis (2017). Cause No 433 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1689/eng@2017-03-01

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.